Correlation Between JERONIMO MARTINS and Metro AG
Can any of the company-specific risk be diversified away by investing in both JERONIMO MARTINS and Metro AG at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining JERONIMO MARTINS and Metro AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JERONIMO MARTINS UNADR2 and Metro AG, you can compare the effects of market volatilities on JERONIMO MARTINS and Metro AG and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in JERONIMO MARTINS with a short position of Metro AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of JERONIMO MARTINS and Metro AG.
Diversification Opportunities for JERONIMO MARTINS and Metro AG
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JERONIMO and Metro is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding JERONIMO MARTINS UNADR2 and Metro AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metro AG and JERONIMO MARTINS is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on JERONIMO MARTINS UNADR2 are associated (or correlated) with Metro AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metro AG has no effect on the direction of JERONIMO MARTINS i.e., JERONIMO MARTINS and Metro AG go up and down completely randomly.
Pair Corralation between JERONIMO MARTINS and Metro AG
Assuming the 90 days trading horizon JERONIMO MARTINS UNADR2 is expected to generate 0.93 times more return on investment than Metro AG. However, JERONIMO MARTINS UNADR2 is 1.07 times less risky than Metro AG. It trades about 0.11 of its potential returns per unit of risk. Metro AG is currently generating about -0.19 per unit of risk. If you would invest 3,260 in JERONIMO MARTINS UNADR2 on September 20, 2024 and sell it today you would earn a total of 380.00 from holding JERONIMO MARTINS UNADR2 or generate 11.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JERONIMO MARTINS UNADR2 vs. Metro AG
Performance |
| Timeline |
| JERONIMO MARTINS UNADR2 |
| Metro AG |
JERONIMO MARTINS and Metro AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JERONIMO MARTINS and Metro AG
The main advantage of trading using opposite JERONIMO MARTINS and Metro AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JERONIMO MARTINS position performs unexpectedly, Metro AG can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Metro AG will offset losses from the drop in Metro AG's long position.| JERONIMO MARTINS vs. AOYAMA TRADING | JERONIMO MARTINS vs. INTERSHOP Communications Aktiengesellschaft | JERONIMO MARTINS vs. ULTRA CLEAN HLDGS | JERONIMO MARTINS vs. Highlight Communications AG |
| Metro AG vs. MOVIE GAMES SA | Metro AG vs. NXP Semiconductors NV | Metro AG vs. GEAR4MUSIC LS 10 | Metro AG vs. TOREX SEMICONDUCTOR LTD |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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